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Response to Review no. 38

I would like to comment on the thoughtful review of Britain’s Place in the World by George Brennan and myself which Professor Gamble wrote in this journal. He was evidently stimulated by the book, as were we in turn by the review, to the point where I thought it might be easier to draw your readers’ attention to the difference between what we would like our facts to show and what they actually do show about Britain’s foreign economic position between 1945 and 1960.

The logical extrapolation of our argument is the one that Gamble makes; that Britain’s manufacturing economy, as it emerged from the 1930s and the war, was better-suited to the quasi-protectionist inter-firm market regulation mechanisms of the EEC than to the UK government’s post-war version of free trade. We did not specify this argument because it seemed to us that many other things were at stake, some of them still waiting for good historical analysis. The great difficulty of such analysis was the thought that was mainly left with us at the end of our book. Measuring the impact of import controls was like prosecuting O.J. Simpson. It needed every possible type of analytical method, and none of them came up with a conclusive answer. Our conviction was obtained only by the weight and correspondence of circumstantial evidence. This made us, I believe justifiably, cautious. But the caution of an academic monograph can be discarded in this journal.

The period 1948-1956 represents one, and perhaps the last, time when British government had a coherent framework in which foreign and foreign economic policy were harmoniously set. The “one-world system” was the best systematic and coherent vision of the national future by which government could steer and it absolutely precluded participating in France’s vision of Europe. The weaknesses of the one-world system have been illustrated and discussed by several works. Ours specified two of them with some quantitative precision. It depended on retaining the high tariffs of the 1930s and the intra-Commonwealth preference structure as eventual bargaining counters in a grand m.f.n. tariff bargain with the U.S.A. But by the rapidly growing Western European economies tariffs were regarded as an insensitive instrument of trade regulation and a barrier to modernisation and growth. When to this was added the political pressure to move towards some form of political unity on the continent through a common market, Britain’s global vision of a possible national future was cracked beyond repair. It had, furthermore, been cracked by those manufacturing economies in comparison with whose goods the United Kingdom’s competitive position was deteriorating, whereas its competitive position towards the USA, like that of the rest of Western Europe, was improving. Some settlement therefore with Western Europe was necessary; the years 1956-63 were to show that very painfully. But was it actually possible to take the path to which our analysis seems logically to point?

Any common framework with western Europe required a readiness to satisfy the economic self-interest of France and Germany, at least. The proposals for the greater free trade area came close to meeting Germany’s economic interests, although not necessarily closer than the common market, but failed to meet those of France. Excluding agricultural trade from the free trade area proposals excluded one vital French interest for which France had in principle forced the Six to provide. Yet it is difficult to believe that this exclusion was fundamental to British economic policy choice. The Agriculture Act (1957) represented the apogee of the Conservatives’ expensive commitment to domestic agriculture and by 1960 officials in the Ministry of Agriculture and the Treasury were keen to reduce it by substituting a European Common Agricultural Policy, and payment by consumers, for deficiency payments from the exchequer. The obstacle to satisfying French national economic interest remained the unwillingness to accept any commercial framework for British trade which might result in continuing discrimination against North America, which no fixed horizon on which that discrimination would end in return for easier access to US markets. The American market and the American tariff remained the ones that mattered. Any new commercial framework including Britain and the EEC had, like the free trade area, to be subordinate to increased transatlantic trade. The idea, much canvassed in 1956, of entering a trading bloc of Europe and its empires in which France, rather than the USA, saved the benefits of shared preferences on Commonwealth markets, was always rejected.

There were persuasive economic arguments for this, not least that even with its protectionist tariffs the USA was the United Kingdom’s best market, but the true grounds were political. Was it genuinely feasible at any moment after March 1950 and before July 1958 to create a Franco-British imperial bloc which did not also imply a British commitment to some form of politically united western Europe? The Schuman Plan was to prove an irrevocable step in French foreign policy and no common commercial framework could be devised which did not require British acceptance of the ultimate political implication of the Treaties of Paris and Rome. That was a quite other version of the national future.

The only plausible counterfactual hypothesis to the choice between the one-world system and membership in some form of European political union is that membership of the European Coal and Steel Community from the outset might have led to a different form of European Community. It might have led to cumulative layers of sectoral agreement on the management of shared economic problems; a common agricultural policy could have followed a common market in coal and steel, a common civil nuclear programme been managed by a less emasculated Euratom, and so on. The political institutions emerging from that progression would at least have been serving national interests otherwise difficult to realise. It is envisageable as a hypothesis, as a road not taken, but only just. Otherwise, the one-world system was the only coherent explanation of how the United Kingdom could remain an independent sovereignty, the one national future that was genuinely national.

The uncompromising seriousness of that choice for a democratic governmental system which had fought so valiantly to preserve nation and empire, the fact that almost the whole of public and political opinion wished still to preserve both, suggest that successive governments in the 1950s had to struggle forwards towards the unrealisable one-world system with obviously diminishing chances of success. From that came their desperate welcome for any suggestion that Germany might swing to their side in their struggle, their propensity to believe on several occasions that France would not go through with its European policy, and even their hopes, against all reasonable estimations, that the common market of the Six would fail. As they knew their own way forward was impossible, the best hope was that the alternative would also prove impossible.

This is probably pushing Professor Gamble further than he would want to go, as he was pushing us beyond the limits we have set to our arguments. Surely, however, after 1956 no-one seriously believed the pound would lead other European currencies into even the limited form of convertibility that came at the start of 1959, and no-one believed it would be the UK rather than the Six which would bargain down the US tariff, and only a rapidly diminishing number believed that the UK could turn the EEC into part of an Atlantic free trade area, a policy which was not supported by the US State Department or Presidency. De Gaulle temporarily held back the threat of the submersion of national sovereignty into a federation, only to foreclose any other possibility. Courageous leadership would have been to set out these terribly harsh facts about the national future to the population between 1950 and 1952. They had faced worse in 1940. They were left in ignorance and that ignorance still permeates most historical discussions of the period through suppositions that the choice of national futures was greater and more enticing than it actually was. Is this too pessimistic for Professor Gamble?